5 Cloud Application Software Stocks That May Be Taken Over

In the software world the big news is that SAP (NYSE:SAP) is buying SuccessFactors (NYSE:SFSF) for $40.00 a share which computes to a 52% premium. SuccessFactors is being purchased at Price/Sales (P/S) of about 8.

Oracle (NYSE:ORCL) and SAP are the two big software behemoths. For a long time Oracle’s strategy has been to grow through acquisitions. On the other hand, SAP has touted a strategy of organic growth.

Now it appears that SAP is on the hunt for more software acquisitions. Here are five cloud software application stocks that are ripe for a takeover.

NetSuite was originally founded as NetLedger by Evan Goldberg and Larry Ellison, the CEO of Oracle.

The stock of the company is trading at P/S at 13.04.

With the exception of P/S the rest of the traditional fundamental data such as P/E and book value is meaningless for this category of companies. Typically these companies are acquired for strategic reasons and not for financial engineering reasons.

I am not recommending buying these stocks right away, but suggesting that they be followed and bought when the criteria of a proven system for making money from technology stocks such as the ZYX Change Method is met.

Disclosure: I am long ORCL.

Additional disclosure: I am long ORCL and have recently taken profits on SAP. Subscribers to ZYX Buy Change Alert may also be long on ORCL and may have recently taken profits on SAP. The buy signal may be given on any of the stocks mentioned in the very near future.

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